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The Day Care or Nanny Conundrum: What's Right for You and Your Kids?

October 10, 2017

Congratulations on the new addition to your family. You’re likely immersed in diaper changings, middle-of-the-night feedings, and visits from friends and family who want to see those tiny hands and feet. In the midst of all these adjustments, you may be thinking ahead to when you return to work, and how to decide between day care and a nanny. These six factors can help you choose which option is better for your family.

Qualifications

Your sister loved her son’s nanny — is she available? If yes, great! Obviously, a trusted personal recommendation means a lot when searching for your ideal care provider. But if you’re on the hunt solo, a good place to start is with resources like Care.com, or local networking groups that can connect you with qualified nannies and day care providers. Look for a caretaker who is first aid and CPR certified through an organization like the American Red Cross. Also seek water-safety certifications and newborn care specialist certifications. Beyond these basics, consider bilingual caretakers or those with degrees in early childhood education for additional learning opportunities. Qualified care providers should be able to supply references from previous families.

Work Schedules

Your work schedule will be a major factor when evaluating your child care choices. Most day cares have set hours of operation. That means you’ll need to find a place that allows you to drop your child off early enough so you can still get to work on time and late enough you’re not scrambling at day’s end. If you work odd hours, a nanny might be the better solution.

Sick Days

A nanny provides one-on-one care to your little ones. Because a nanny is the sole care provider, they will likely to need time off when sick, for personal reasons and for the occasional vacation. That means you or your significant other may need to take time away from work when the nanny is away. If your jobs don’t offer the flexibility to occasionally work from home, a day care might be the better solution. If you choose to use a nanny, many parents find it wise to enlist a back-up, like a nearby grandparent, to fill in when the nanny can’t be there.

Day cares generally serve multiple families. Because of this, a day care will likely have certain rules in place regarding sick children to prevent the spread of illness. That might mean in the case of certain symptoms (like a fever or upset stomach) you won’t be allowed to drop your baby off. And if the child develops these symptoms while there, you’ll be called to pick up your child. This could wreak havoc on your work schedule. When you first start day care, this might happen frequently until your little one builds up an immunity. If your baby has additional health considerations, a nanny in your home might provide a safer environment.

Holidays

Holiday time off is also a consideration. A nanny might request extra time off during the holidays for travel. Will that work with your schedule? On the other hand, a day care might follow the local school system’s calendar. With a day care, you’ll likely know in advance which days you’ll need a second option, whereas with a nanny, the situation might be more unpredictable. Early communication is key to planning.

Taxes and Payments

Whether you hire a nanny or send your child to day care, you’ve got to pay for the service. When it comes to paying a nanny, you are required to follow the IRS Household Employer’s Tax Guide. That means you’ll need to withhold and pay Medicare and Social Security taxes and a federal unemployment tax. The “nanny taxes,” as they are called, require a lot of paperwork, but you can sign up for a payroll service to help. When you send your child to a day care, on the other hand, you can likely set up easy automatic payments through your checking account. Seek advice from your tax professional, whichever route you choose. You may be able to offset child care costs with the child care tax credit or use your Dependent Care FSA to pay for services.

Cost

The tax payments and possible credit will be factors regarding which option is most cost-efficient, and so will the size of your household. If you’ve got more than one child, a nanny might cost less than paying double fees at a day care because many day care providers charge by the child.

Choosing someone to care for your child is a big responsibility. This is the first big decision many new parents make with their first child. Plan now for your baby’s immediate and long term future. When it’s time to start a college fund for your new bundle of joy, contact your Farm Bureau agent for advice and tools.

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